Walmex Q4 net income down by 18.4%

By Staff Writer

Feb 18, 2016 09:19 AM EST

Wal-Mart De Mexico SAB, a Mexico-based retailer, said that its fourth-quarter net income fell 18.4% from the previous year period. The company posted quarterly EBITDA of $13.98 billion pesos.

Walmex earned a net income of $8.5 billion pesos during the fourth quarter of 2015, down 18.4% from $10.4 billion pesos in the previous year period. Earnings per share dropped 18.2% to $0.485 pesos from $0.593 pesos in the same period last year.

Income from discontinued operations amounted $8.5 billion pesos, a decrease of 17.8% from $10.3 billion pesos in the year-ago period. Operating income for the fourth quarter declined 16.6% to $11.4 billion pesos from $13.7 billion pesos in the corresponding period last year.

Walmex reported quarterly total revenues of $145.91 billion pesos, an increase of 12.7% from $129.44 billion pesos in the fourth quarter of 2014. Net sales jumped 12.8% to $144.98 billion pesos from $128.6 billion pesos in the prior year quarter.

The retailer also noted that the board of directors will propose an ordinary dividend of $0.56 pesos a share, and an extraordinary dividend of $1.12 pesos a share. Both the ordinary and extraordinary dividends sum up to $1.68 pesos a share and are payable in cash.

For the ended December 31, 2015, Walmex posted net income of $26.4 billion pesos, down 13.3% from $30.4 billion pesos in the prior year. On a per share basis, annual earnings fell 12.9% to $1.508 pesos from $1.732 pesos in 2014.

Income from discontinues operations dropped 0.4% to $24.94 billion pesos from $25.04 billion pesos in the previous year. Annual operating income amounted to $34.97 billion pesos, up 0.7% from $34.72 billion pesos in 2014.

Total revenues jumped 11% to $489.4 billion pesos from $440.99 billion pesos during the year 2014. Net sales totaled $485.9 billion pesos in 2015, up 11% from $437.66 billion pesos last year.

In January, Walmex named Guilherme Loureiro as the new chief executive officer of the company, Reuters said. Walmex announced its intention, in January, to sell Suburbia, its clothing unit in order to concentrate on its main hypermarket business. Currently, Suburbia manages nearly 117 stores in Mexico and contributed less than 4% to the retailer's sales last year. The retailer's same-store sales increased 8.6% during the fourth quarter of 2015.

Bloomberg quoted BTG Pactual, which said that the retailer's quarterly results were nearly 15% below analyst's predictions. Pedro Farah, chief financial officer at Walmex, said in a conference call that the year 2015 was a period of "transition" for the retailer. The shares of the company fell 5.2% to 42.40 pesos at the end of Wednesday's trading session on IPC index.

High spending due to store closures, rise in advertisement spending, and the increase in bonuses for workers impacted the retailer's earnings results during the fourth quarter. However, Walmex remains hopeful with regard to its future balance sheet.

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